(CNN) -- U.S. forces killed as many as 300 Iraqis Tuesday in a massive battle -- possibly the biggest firefight of the war so far -- in the Euphrates Valley east of Najaf, Pentagon officials said.

According to initial reports, the fighting -- about 95 miles south of Baghdad -- pitted elements of the U.S. 3rd Infantry Division against Iraqi foot soldiers firing rocket-propelled grenades and other weapons.

Officials said the division's 3rd Squadron, 7th Cavalry had encountered a large Iraqi ground force -- possibly consisting of front-line Republican Guard or Saddam Hussein's Fedayeen paramilitary guard -- but a sandstorm in the region prevented troops from calling in air cover. (Iraqi military) (Fedayeen)

Pentagon officials said some U.S. combat vehicles had been lost to ground fire, but there were no immediate reports of U.S. casualties.

The officials said the Iraqi troops were all dismounted, meaning they had no tracked vehicles -- no tanks or armored personnel carriers.

It was not clear what Iraqi division was involved in the fighting, officials said. It's known that some elements of the Republican Guard's crack Medina Division were near Karbala, about 40 miles closer to Baghdad.

Officials said the force also could have been a large encampment of Fedayeen fighters, or even regular army units.

When asked if those type of irregular or paramilitary forces would be assembled in such a large group, one official said, "There could be thousands of them out there."

Monday, a 30-strong Apache helicopter group was met with a "wall of gunfire" near Karbala, and several choppers were hit. One Apache went down and the two pilots were taken prisoner by the Iraqis. (Full story)

Farther south, bloody battles were also being waged in the city of Nasiriya, with machine gun fire, mortars, and helicopter units involved.

U.S. officials said some U.S. troops and Iraqi civilians were killed, though they did not say how many. One U.S. Marine was wounded by friendly fire, officials said.

It was the third consecutive day U.S. Marines have battled Iraqi forces for control of the city, which is located along a key north-south route. (Full story)

Marines also seized a hospital in Nasiriya and captured nearly 170 Iraqi soldiers who had been staging military operations from the facility -- a move U.S. officials said clearly violates the Geneva Convention.

No civilians were in the facility, which U.S. Central Command said was "clearly marked as a hospital by a flag with a red crescent."

Marines confiscated over more than 200 weapons, more than 3,000 chemical suits with masks and Iraqi military uniforms in the hospital, and found a T-55 tank in the hospital compound, Central Command said.

Marines were fired at from the hospital a day earlier.

'Whap, we're in. Whap, we're out'
British commanders said it appeared a popular uprising against the ruling Baath Party was under way in Basra, as British troops and tanks maneuvered under the cover of darkness near the city in southern Iraq.

The commanders, with troops outside Basra, told reporters for the British network ITV they had seen groups of 40 to 50 citizens at various locations on the streets and that British forces had taken out an Iraqi mortar firing on the apparent protesters.